Biodiesel an option for 2011 RFS2 shortage

By Luke Geiver | July 13, 2010
Posted July 14, 2010

The U.S. EPA has issued the proposed production volumes for the 2011 RFS2, calculating biomass-based diesel for 2011 at 800 million gallons. To formulate the production number, EPA examined both industry capacity and recent production rates. "As of April 2010, the aggregate production capacity of biodiesel plants in the U.S. was estimated at 2.2 billion gallons per year across approximately 137 facilities," EPA said.

"The biodiesel industry stands ready, willing and able to produce the wet gallons required to comply with the program," said Joe Jobe, National Biodiesel Board CEO. "By 2011, much of the uncertainty that has accompanied the start up and transition of the program in 2009 and 2010 will have been eliminated."

Advanced biofuels will total 1.35 billion gallons and cellulosic biofuels, according to the EPA, will total between 5 million and 17.1 million gallons in 2011. "Based on analysis of market availability, EPA is proposing a 2011 cellulosic volume that is lower than the EISA target," EPA said.

The EPA believes, however, that it may be appropriate to allow excess advanced biofuels to make up for the shortfall in cellulosic biofuel, including excess biomass-based diesel. "If we were to maintain the advanced biofuel and total renewable fuel volume requirements at the levels specified in the statue, we estimate that 125 million to 144 million ethanol-equivalent gallons of additional advanced biofuels would be needed, depending on the standard we set for cellulosic biofuel."

"Biodiesel is well-positioned to meet volumes in this category relative to other advanced biofuels, and will likely play a significant role in meeting them," Jobe said. The markets, he added, will ultimately decide how much biodiesel is used to fulfill the generic category of advanced biofuels.

Under current market conditions, the EPA first considered whether the 800 million gallon volume can be met in 2011 if biomass-based diesel production may also qualify for the cellulosic biofuel volumes. "We believe that the 0.8 billion gallon standard can indeed be met," EPA said. "Since biodiesel has an Equivalence Value of 1.5, 0.8 billion physical gallons of biodiesel would provide 1.20 billion ethanol-equivalent gallons that can be counted towards the advanced biofuel standard of 1.35 billion gallons," adding, "Of the remaining 0.15 billion gallons, up to 0.026 billion gallons would be met with the proposed volume of cellulosic biofuel."

"We believe that Congress wanted to encourage the development of advanced renewable fuels and allow in appropriate circumstances for the use of additional volumes of those fuels in the event that the projected volume of cellulosic biofuel falls below the statutory mandate," EPA said.

Also included in the EPA's proposal report was information on domestic cellulosic diesel producers. The EPA sited two companies capable of producing cellulosic diesel in 2011, Cello Energy and Bell Bio-Energy. Producers using canola oil, grain sorghum, pulpwood or palm oil as a feedstock may soon qualify for RFS2 compliance. The EPA is proposing changes for those feedstocks if it is determined that certain greenhouse gas reductions are met.

Because the 2011 production values set by the EPA are only in the proposal stage at this point, Jobe said the recent rulemaking is only a formality put in place to allow public feedback. "NBB's comments on this rulemaking will be supportive of the EPA's decision, with the possible addition of some administrative and technical comments," Jobe said.

To offer changes on the proposed rule, the EPA will accept comments for 30 days after the proposal is posted on the Federal Register. To send comments via email: To view the full rulemaking document, click here.
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